Get News & Views Updates
Most Popular This Week
Popular content
Today's Top News
Reining in the Gods of the Fed
Here's a story that reads like the script of an old B-grade monster movie - and it would be comic, were it not so serious. The monster is named "The Fed," a hydra-headed creature with enormous and destructive power, which it exercises from within the misty confines of a marble cavern that is unapproachable by commoners.
In real life, the Fed is the Federal Reserve - a private, for-profit bank that is run by and mostly for other big bankers. But it's also its own, secretive branch of our national government. The Fed creates its own money (check your bills - they're called Federal Reserve notes), it sets our interest rates, it regulates Wall Street and (as we've recently learned the hard way) it has sweeping power to bail out Wall Street.
The Fed operates largely beyond the purview of Congress or even the White House, and both the media and the public are essentially shut out from scrutinizing its financial machinations. The banking gods who dwell within the Fed's temple are said to have knowledge, even wisdom, that the rest of us cannot fathom, so the Powers That Be tell us that these deities must be left alone to make their decisions and work their wonders.
But, wait - aren't these the same omniscient gods, including Alan Greenspan and Ben Bernanke, that failed to see - much less forestall - the looming financial disaster created by Wall Street gamblers who used people's homes as their personal gambling chips during the past decade? Yes, indeed, those are the gods - the very ones who were supposed to be monitoring and regulating the gamblers to keep them from crashing our financial system and wrecking America's real economy.
Where were these all-knowing ones when we needed them? The blissful Bernanke, who heads the Fed, now claims that the crash of '08 happened because he and other gods did not have enough regulatory clout to stop it.
"Give us more power," is Bernanke's current demand to Congress!
But, wait - as New York Times analyst David Leonhardt recently wrote - Fed officials failed to use the substantial power they already had. Why? Because they're too cozy with the quick-fingered Wall Street gamblers they "regulate," so they simply refused to see (or believe) clear signs that the whole system would topple as housing prices headed over the cliff.
While Bernanke is a very smart guy, he was soaked in the stupid conventional wisdom of the day, which was that housing prices only go up. In 2005, he dismissed non-conformist critics of the Fed's inaction by flatly declaring, "We've never had a decline in house prices on a nationwide basis." And, two years later, as prices were plummeting and modest-income families were defaulting on their home payments, he calmly assured us that the gods "do not expect significant spillovers from the subprime market to the rest of the economy."
Our financial rulers were so intoxicated with the fumes of their own omnipotence that they failed abjectly as regulators, as public servants and, most certainly, as gods. The fact that they didn't see what was coming has caused immeasurable pain to millions of families. As Leonhardt asks, "Why should Congress, or anyone else, have faith that future Fed officials will recognize the next bubble?"
Yet, without apologizing for (or even acknowledging) their failure, these denizens of the temple now insist that Congress entrust them with even more authority over our financial well-being.
Many lawmakers, however - led by such knowledgeable and politically diverse Fed critics as Rep. Ron Paul (a libertarian) and Sen. Bernie Sanders (a socialist) - are daring to challenge the gods, proposing steps to rein in their arrogance, aloofness and authority. For more information on this challenge, contact the watchdog group OMB Watch at www.ombwatch.org/fiscal_stewardship.
- Posted in
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Our Comment Policy can be viewed here. Please follow the guidelines. 8/21 Note to Readers: Spam Filter Glitches...
21 Comments so far
Show AllYes, and the reappointment of Bernanke, who is perhaps the most powerful man on the planet, is taking place in virtual media darkness.
Isn't it ironic that the Rod Blagojevich scandal will end up receiving 100'xs more media coverage than Bernanke's confirmation.
Shouldn't there be a nationwide discussion detailing every decision made by Bernanke before we let him continue hollowing out the country and serving up our wealth to his criminal banker buddies?
You could easily make the case that the reappointment of Bernanke should be a process that's given as much time and attention as is given to the Presidential race, which lasts over one year.
Another obvious question no one is asking: Who are the other "candidates" for the position?
On a scale of 1 to 100, Blagojevich's crimes rate .000000000001, while Bernanke and the Federal Reserve Conspiracy's crimes rate 99.9.
Hightower is giving the FED too much credit. Who said the Fed didn's see any of this coming?
especially considering they made mucho bucks on the way up the bubble - received free money on the way down the bubble which they then used to buy out their competitors for about a dime on the dollar.
If they didn't see this coming they sure used it to their advantage and to profit off it.
Sounds like a highly profitable business to me......
WE THE PEOPLE are only commodities and areas to ream out new profits - not their constituency.
The Fed and their member banks are vampires and freeloaders. They take and take but create NOTHING of VALUE.
It's well past the time the USA currency is returned to WE THE PEOPLE.
TOO bad the president and the congress is so well bought and paid for.
The standard line for corruption concerning wars, energy, banking, etc.;
oops, my bad
mtdon,
I agree totally. What aggravates me about this article is the fact that it seems so obvious now that this whole financial crisis was staged! Why can't we exert energy in trying to prove that!? Why exert any energy at all in debating it?! Why do writers write ad nauseum about this corrupt country "accidentally" getting into such quagmire's that now we have to figure out how to get out of this??? We're not meant to get out of this. This is the leveling of the global marketplace.
Change has been predicted and called for for well over 25 years. Unfortunately, it is the corrupt monied interests who have decided what that change will be. It will NOT be for the common people.....but against us! We needed to change toward a more compassionate, spiritual, egalitarian people.....can we still do it? When words like "Socialist" evoke fright, we have a problem. People have been dumbed down, overfed, brainwashed, and over medicated! It's almost time for the slaughter.
So true. There's very little agreement in our confused, at best half-educated society what socialism even means, so it's next to impossible to have a rational discussion about it even at CD. If at least half the number of those calling themselves progressives are CONVINCED it means Stalinism or Maoism, or even Nazism, and that's all they're ever going to think about it, discussion over. Most Americans can't put "compassionate, spiritual, egalitarian" together with "socialist", so we're perpetually left with trying to come up with solutions for all these problems, like Hightower's anger with the Fed (he's right, but he won't solve the problem) by figuring out new ways to mildly reform capitalism through regulating it or reining in its most flagrant abuses. And even that Democrats like Obama are totally unwilling to seriously consider.
Both parties want full-bore in-your-face capitalism pillaging and rampaging across the globe, for nothing but privatized profit and the devil take the rest. We aren't going to "rein in" anything by constantly seeking to find new ways to accommodate it. Hightower, Michael Moore, even Nader really don't want to go so far as getting rid of capitalism. They're committed to working their asses off their entire lives to regulating and reining it in. Hasn't worked yet, except in a limited way under FDR, and none of the Democrats anywhere today are remotely as radical as FDR. Obama won't do anything Roosevelt did to save capitalism from its very worst crimes and excesses. He's content to channel Herbert Hoover and let the outlaws decide what moves they want to make next, with our money enabling them. Obama's a farce, the system's a farce, and ideas that we'll turn any of this around by endlessly trying to accommodate belligerent criminals are a total farce.
Ephraim.....well said!
"...by figuring out new ways to mildly reform capitalism through regulating it or reining in its most flagrant abuses."
Capitalism is simply a synonym for plunder. That is all capitalism really is, the ability to exploit resources and people, in other words, plunder them.
How does one reform plunder, regulate plunder? How does one rein in the most flagrant abuses of plunder? Plunder is abuse. Capitalism is abusive. And, where in the constitution is the economic system of capitalism specified to be the economic system of the new country? Where is a "two party system" specified for that matter? And, now we have a two party capitalist political system overlaid on the constitution.
Thomas Jefferson said it best:
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
He may have been a diddling slave-owner, but he was a damned smart one.
Gary
"homeless on the continent their fathers conquered"
This was a hint from Jefferson that he was onto himself - he understood his own kind.
Conquering - what America's fathers did - always creates homelessness, and Jefferson reasoned that one day, a tribe of slave-seekers even more aggressive and racist than his own would show up in America and enslave anyone with less resources than themselves.
Qatzelok. Nicely said.
I worked for a number of years for one of those large banking corporations and came away from the experience convinced that large financial institutions are all criminal conspiracies. If that's true, then the Federal Reserve is capo de tutti capo.
Agreed.
A while back public radio had the story of the corporate criminal conspiracy that the movie "The Informant" was based on. One of the FBI agents involved in the case said that after the investigation, he came to the conclusion that corporate crime is so wide spread, that if you see a bunch of middle aged men in suits having a meeting in a hotel lobby you can be pretty sure something illegal is going on...
Bernanke needs to be given his walking papers and the Fed needs to be governed by a panel of elected ordinary capable citizens who serve for a limited period of time before being replaced with other citizens with complete and absolute transparency to every single action they take!!!!!
I would honestly like to know why the Federal Reserve and it's member banks are private? Why must a government which can print it's own money, and control it's own money supply, and the interest rates charged to banks, pay interest to private banks for these fundamental governmental operations of unsurpassed importance to the country? Can it not be done by a publicly owned central bank? If not why not? If someone out there knows the answer to this question, please inform us. I can't find the answer anywhere.
I have read that it has something to do with separating central banking operations from politics. Is there an institution more politically connected than the Fed?
fd3200,
Many of your questions can be answered at a variety of websites. A good start would be webofdebt.com and another is professorfekete.com. Both authors have studied the money/federal reserve issue with great intensity. These sites will also send you to other informative links.
Good luck.
Thanks Gail
Read The Creature from Jekyll Island. You'll learn about how the Federal Reserve was created. Also learn about the The First and Second Banks of the United States.
The Federal Reserve usurped the power of the three branches of our government and took control.
Hightower: "Yes, indeed, those are the gods - the very ones who were supposed to be monitoring and regulating the gamblers to keep them from crashing our financial system and wrecking America's real economy."
--America's "real economy" IS the financial system. Outside of that we have almost no economic system. It's all been outsourced, or most of it has, so we have over 20% REAL unemployment. And who knows how high underemployment is by now? Wall Street is the only economy that matters, to both wings of our criminal duopoly, and no president has been a greater friend and benefactor to Wall St. hustlers than Obama. We all know this. Who in this cowering Congress is going to bring the hammer down on the Fed? Sanders and Ron Paul? Yeah, they always manage to get tons of legislation passed. Hell, they must have one or two others, among 535 member of both houses, to support their quixotic assault on the Fed's overarching power. That should do the job.
An OMG independent consumer fraud protection agency'd be best!
There was a guy who was about to take on the Fed Reserve the way he stood up to Big Steel. A month after he drafted an execute order he was killed in Dallas.